Economists had expected the public finances to break even in July, a month when Treasury revenues are typically boosted by self-assessment income tax payments.
Despite strong tax receipts, the Office for National Statistics reported public sector borrowing of £1.8bn last month.
During the first four months of the financial year, the cumulative deficit reached £56.7bn. Although this is lower than during the same period last year, it remains £2.3bn above the forecast of the Office for Budget Responsibility.
Total public debt stood at £2.98tn, or 94% of GDP, an increase of £96bn compared with a year earlier. The rise is consistent with Labour’s plans to increase borrowing for infrastructure investment.
Healey is due to present his budget on 28 October. The outlook for the public finances is expected to be weaker than projected in Rachel Reeves’s March spring statement, when the impact of the Iran war had only just begun to emerge.